In addition to asking respondents to answer questions on risks for directors, we also asked them to comment on the directors and officers insurance their organisation purchases and their corporate indemnification arrangements.
72% of our clients responded their organisations indemnified their directors to the fullest extent allowed by law
72% of our clients responded their organisations indemnified their directors to the fullest extent allowed by law, while 11% said the indemnification was only where approved by shareholder vote. Of course, this can be a key issue in some directors and officers claims, particularly for policies that look only at the question of whether the company is required or permitted at law to indemnify directors. We also asked respondents to rank the value they see in various aspects of their directors and officers cover. The highest values went to understanding how directors and officers claims will be controlled and settled and a choice of lawyer-counsel. The lowest values went to the extent to which clawback provisions apply to the policy and whether there is coverage to appoint a public relations expert to manage reputation risk in the event of a claim. These last two were the lowest ranked in last year’s survey as well.
Looking at the regional split of the responses, we can see all regions except Asia ranked these two as the least significant, except in Asia where having a broad definition of who is insured ranked second lowest with reputation risk cover coming in third lowest.
Handling and settlement of claims was number one in all regions except North America, where it was choice of lawyer, and Latin America, where it was cover for fines and penalties.
In terms of choice of defence counsel, only 18% of respondents ranked cost as being an important factor while 92% said “Expertise in Field” was an important factor.
Turning to policy limits, retentions and premiums, only 11% of respondents had seen reductions in their policy limits over the last year, with just 2% saying they anticipated a reduction next year.
By contrast 64% had seen an increase in premium and 44% anticipated an increase next year. Of those who had seen their limits change, 44% said this was down to increased cost while 44% said it was down to availability of capacity.
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| Title | File Type | File Size |
|---|---|---|
| D&O Directors Liability Survey insurance coverage | 2.2 MB |
